Pomona, Developer Settle Suit : Housing: The city’s bowing to the demands of Urban Ventures Corp. clears the way for 216 apartments on Holt Avenue and averts imperiling its budget.

The City Council on Tuesday reluctantly settled a $4-million lawsuit, clearing the way for construction of a 216-unit apartment complex on Holt Avenue.

Council members agreed to the settlement after the city attorney and city administrator urged them to live up to commitments made to the developer and warned them that the suit put the city in financial peril.

Urban Ventures Corp. filed the lawsuit in December against the city and its Redevelopment Agency.

The suit said the city agreed to sell the corporation four acres on Holt Avenue, between Palomares and Towne avenues, for an apartment project but reneged on the deal by changing the zoning in the General Plan to block the development.

The zoning was changed from high-density mixed use to commercial and single-family residential.

Under the settlement, the city must approve zone changes to clear the way for the apartment project and pay Urban Ventures $16,000 to cover its legal expenses.

The city must also sell the property to Urban Ventures for $900,000, the price that was established in 1987.

Councilwoman Nell Soto complained that city staff members in 1987 had led council members to believe they were voting simply to sell the property to Urban Ventures, not to approve any future development plan.

Mayor Donna Smith on Tuesday night suggested that the council reject the proposed settlement, but City Atty. Arnold M. Glasman immediately asked for a closed-door session to discuss the legal issues.

Afterward, when the council resumed its meeting in public, Glasman said the city must live up to its contracts. “If we don’t approve this settlement,” he said, “the city is exposing itself to substantial financial impact upon the redevelopment and city budgets.”

City Administrator Julio Fuentes promised the council that the city will require Urban Ventures to meet all building standards and other commitments.

Then, without further comment, the council voted 3 to 0 to approve the settlement, with Smith abstaining.